Fix air travel in America: Adjust the passenger facility charge

Within the infrastructure debate in Washington, let us not lose sight of the condition of America’s airports.

President Trump and newly elected members of Congress campaigned on a promise to fix our country’s outdated infrastructure, often citing airports as a prime example. But if the past has taught us anything, it’s that everyone holds hands when it comes to talking about infrastructure, but points fingers when it comes to paying for it.

{mosads}The case for investing in airports is clear. U.S. airports count themselves among the world’s busiest, yet no U.S. airports — once the envy of the world — crack the top 30 for the world’s best airports. From London’s Heathrow to Seoul’s Incheon, countries around the world — with whom we directly compete for tourism dollars — have prioritized air travel infrastructure, while America’s aging, inadequate facilities are creating more hassle and congestion than ever.  

Without improvements, passengers won’t just lose their time and patience: the U.S. economy stands to lose billions of dollars in travel spending if nothing is done to address the state of our country’s air travel infrastructure. In 2016, Americans avoided 32 million trips because of airport hassles, costing $24 billion in spending.

Can this problem be solved? Since Congress is loath to raise taxes, the outlook for any transportation pay-for is usually bleak. But, when it comes to airports, there is a simple tax-free solution: raise the cap on the passenger facility charge (PFC), which gives airports the option to adjust their own user fees if they need infrastructure improvements.

The PFC is a user fee that passengers pay as part of a ticket each time they travel through a U.S. airport; the collected funds pay for improvements at that airport. Although the PFC has been around since 1990, Congress has not adjusted its cap for inflation since 2000, when it was raised to $4.50. In those 19 years, its purchasing power has diminished by more than 50 percent because of inflation.

This is why some airports appear stuck in a different decade. 

Congress can take a significant step to modernize our nation’s aviation system by keeping the maximum PFC airports can charge consistent with inflation. Plus, unlike a federal tax, in which Congress determines the specific rate everyone will pay, Congress wouldn’t be raising airport fees at all. PFC rates are set locally on an airport-by-airport, project-by-project basis — Congress simply sets a limit on what airports can charge.   

This solution is building momentum with both Republicans and Democrats. In 2018, a bill increasing the PFC sailed through the Senate without a single objection. In a recent congressional hearing, members on both sides of the aisle expressed support. And the travel industry — including hotels, car rental services and destination marketing organizations — supports a cap increase.

With such broad industry and bipartisan support, why hasn’t it happened? The airlines are opposed, arguing that airports have the resources they need to modernize. But nothing could be further from the truth.

Far from being flush with cash, airports are taking on more debt, needing loans, bonds and other financing to pay for existing projects. Federal Aviation Administration (FAA) data show airport debt has ballooned by 27 percent to $91 billion total in the past decade. And without a PFC increase, they will continue to take on even more — racking up millions of dollars in interest over the next several decades and costing travelers more in the long term.

Airlines also argue that a $4 PFC increase would discourage passengers from traveling. That’s right — the airlines that brought you the $25 checked bag fee, $50 seat assignment fee and $200 change fee argue that a PFC increase, which would fund enhancements to safety and capacity, would deter travel. Only in Washington.  

The truth is, not all fees are created equal — and travelers know it. In a survey conducted for the U.S. Travel Association by Research Now, nearly 60 percent of travelers said they would be willing to pay an additional $4 or more per flight for projects at their airport that reduce congestion, increase security and provide more airline options. In the same survey, travelers ranked government fees and taxes second-to-last in the list of the most important factors when booking an airline ticket.

For the benefit of travelers, our national security and the health of our economy, it’s time for Congress to act. By 2025, more than 1 billion passengers will be flying to and within the United States each year. Congress must decide now if we will welcome these passengers with modern, efficient facilities that encourage growth, or aging, inadequate airports that frustrate passengers and stunt air travel demand. The cost of doing nothing will be heavy indeed, and raising the PFC cap is an option that should be palatable and passable for both chambers. Its time has come.

Tori Barnes is executive vice president of public affairs and policy of the U.S. Travel Association. Follow on Twitter @USTravel.